COLLECTOR OF CUSTOMS VS TABANI TRADERS, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2191 (2017)

Customs Act (IV of 1969)---

----Ss. 32(3), 79, 80, 83, 179, 193 & 195---Finalization of assessment after filing goods declaration---Re-opening of the case and making fresh assessment---Importers had filed goods declaration under S.79 of the Customs Act, 1969 and the Customs Department assessed the same under S.80 of the Act during processing of the goods declaration---Once the assessment was finalized and the goods declaration was cleared under S.83 of the Act, it could only be reopened under S.195 by the Federal Board of Revenue or the Collector within two years or an appeal must be filed under S.183 of the Act within 30 days before the Collector Appeals or a show-cause notice be issued under S.32(3) of the Act---Collector in order-in-appeal, had rightly observed that after clearance of the goods, re-assessment of the same was against the spirit of Ss.193 & 195 of the Customs Act, 1969; even otherwise, recovery created to view message of clearance of goods, was not warranted under the law---Department was not empowered under S.83(3) of the Customs Act, 1969 to reopen 'an out of charge' goods declaration---Impugned order was neither fanciful nor colorful, but was passed after detailed scrutiny of the case, fell well under the warrant of law and needed no interference---All the appeals being without merits, were dismissed, in circumstances.

Sajjad Rizvi, A.C. and Syed Hamid AO for Appellants.

Sardar Muhammad Ishaque for Respondents.

Date of hearing: 16th March, 2017.

JUDGMENT

MUHAMMAD NADEEM QURESHI, MEMBER JUDICIAL-I.---By this order, I shall dispose of Customs Appeals Nos.K-676/2015 to 696/2015 filed by Appellants, against the Order-in-Appeal No.9896 to 9916/2015 dated 02.03.2015 passed by the Collector of Customs (Appeals), Karachi. These appeals have identical issue of law and facts therefore, being heard dealt with and disposed of simultaneously though this common order in the light of the judgement of the Honorable High Court of Sindh in Customs Reference No.157 of 2008, S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Customs (Adj-I) and others.

2.Since, these twenty one (21) appeals are based on similar facts and question of law, therefore, it is needless to reproduce facts of each case separately, hence for reference the fact of Appeal No.K-676/2015 are taken into consideration for decision, wherein, facts of the case are that the Importer imported a consignment of "Mineral Oil" under HS Code 2710.1991 from UAE and filed Goods Declaration vide machine No. KPPI-HC-48709 dated 05.05.2014 was declared at the rate of unit value of US$ 0.74/kg whereas the same were assessed at the rate of unit value of US$ 1.28/kg for clearance of imported goods in terms of Section 79(1) of the Customs Act, 1969 and declared the description, classification, quantity, origin, weight and import value supported by the commercial invoice, packing list and bill of lading, FTA etc. The Customs Department opened their case, for exercise of jurisdiction under Section 80 of the Customs Act, 1969, read-with Rule 438 of the Customs Rules, 2001 to dissatisfy the description, classification, quantity, origin, weight and import value.

3.The Collector of Customs, (Appeals) Karachi, vide Order-in-Appeals Nos. 9896 to 9916/2015 dated 02.03.2015 decided the matter. The operative part of the order reproduced as under:--

"I have examined the facts of the case and have gone through the record besides considering the verbal and written arguments of the both parties. After completion of assessment and goods being out of customs charge, the matter had become past and closed transaction. The respondent officials had no authority to re-open the case with a view to revisit the assessment. In case the officials had found out that the appellants had committed an offence of misdeclaration or some duty had escaped due to inadvertence or error, a proper notice under section 180 of the Act ought to have been issued. Without the issuance of such notice, changing the classification or value of the goods was arbitrary. This principle has already been laid down in case of Messrs Sikandar Enterprises v. Customs, Excise and Sales Tax Tribunal Karachi vide Spl. Customs Appeal No. 148 of 2001.

5. The Responding officials had the option to exercise their right of appeal under Section 193 of the Customs Act as held by Honourable Sindh High Court in case of Messrs Paramount International (2014 PTD 1256). The respondents chose not to exercise this right and arbitrarily changed the assessment which already stood finalized. In a recent judgment in Customs Appeals Nos.K-729-735/2014. The Appellate Tribunal while accepting the appeals against recovery created through "view massage" after clearance the goods, ruled that "therefore, the re-assessment made by the respondent No.1 of the GD of the appellant after clearance, amounts to conduction of audit under Section 264 of the Customs Act, 1969 to which he is not empowered, rendering his act without power / jurisdiction as such void ab initio and coram non-judice. The only course left for the respondent No.1 was to challenge the said order before Collector of Customs (Appeals) under Section 193 of the Customs Act, 1969, Instead of the prescribed method the respondent No.1 re-opened the assessment / clearance order under Section 195 of the Customs Act, 1969 under which powers are either vested with the Board or the Collector of Customs. Therefore, the act and commission of the respondent No.1 is also in derogation of Sections 193 and 195 of the Customs Act, 1969 and such of no legal effect such type of recovery can only be created upon passing of an order after issuance of show-cause notice under Section 32(3) of the Customs Act, 1969. While creating recovery through view message the respondent No.1, in fact committed violation of provision of Section 32(3) of the Customs Act, 1969 and principle of natural justice, rendering the recover so created without any lawful authority and as such void ab initio."

In view of the afore-going discussion. I am led to conclude that respondent officials action to open the case and to make fresh assessment was beyond jurisdiction and arbitrary. Accordingly the current assessment is set-aside."

4.Being aggrieved and dis-satisfied with the impugned Order-in-Appeals the appellant filed the instant appeals before his Appellate Tribunal on the grounds incorporated in the Memo. of Appeal.

5.On the date of hearing Mr. Sajjad Rizvi, Assistant Collector of Customs appeared on behalf of the appellant/ department reiterated the contentions of the appeal and contended that in terms of the provisions of Section 80(2) of the Act, the imported goods and the documents related thereto can be examined/assessed even after clearance of the goods from the port, thus, the learned Collector of Customs (Appeals), findings in this regard are incorrect. He further contended that as per explicit provisions of section 80(3) of the Customs Act, 1969, the checking/re-assessment is to be made without prejudice to any other action including the issuance of the show-cause notice in terms of Section 32 of the Customs Act, 1969. That being so, without re-assessment under Section 80(3), the recoverable amount cannot be calculated and without such an amount it is not possible to issue a show cause notice under Section 32 of the Customs Act, 1969. Thus, in view of the above, the Collector of Customs (Appeals) findings in the impugned Order-in-Appeals are totally incorrect and against the law and procedure prescribed for the goods to be cleared under WeBOC System and without prejudice to the above in compliance of the learned Collector of Customs (Appeals) findings the show-cause notice in terms of Section 32(3) of the Customs Act, 1969 is being issued. He prayed that the impugned Order-in-Appeals may kindly be set aside and the subject appeals may kindly be allowed.

6.On behalf of the Respondents, Sardar Muhammad Ishaque, Advocate, appeared and contended that, the subject consignment was imported through banking channel and GD was filed, which was accordingly assessed and consignment was out of charge, gate out dated 12.05.2014 later on post release verification (PRB) the consignment was reassessed on 30.09.2014 which causes the subject controversy when after the assessment further demand raised. He further contended that the relevant quarters illegally enhanced the value and re-open the past and closed transaction, neither they are competent for re-assessment of the GD nor proper proceeding adopted regarding any short recovery. He also referred the copies of the judgements passed by the Tribunal in Customs Appeals Nos. K-487 to K-511/2015, Appeals Nos. K-1049 to 1070/2015 and K-523 to 531/2015 and accordingly, he prayed that this Hon'ble Tribunal may be pleased to reject the subject appeals in accordance with the law and observations made therein above referred judgements.

7.Arguments heard. After perusal of the record as well as arguments extended by both the parties it has been observed and noticed that, in our view Order-in-Appeal passed by the Collector (Appeals) is absolutely in conformity with the provisions of Customs Act, 1969 as contained in Sections 80, 32 and 179 of the Act. The appellant department is not empowered under section 80(3) of the Customs Act to reopen 'an out of charge' GD. The importers file GDs under Section 79 and the Customs assess the same under Section 80 during the processing of GD. Once the assessment is finalized and the GD is cleared under Section-83 of the Act, it can only be reopened under Section-195 by the Board or the Collector within two years or an appeal must be filed under Section-193 within 30 days before the Collector Appeals or a Show-Cause Notice be issued under Section-32(3) of the Customs Act.

8.Under the prescribed legal agreement of law, this Court agreed with the observations made by the Collector in Order-in-Appeal Nos. 9896 to 9916/2015, after clearance of the goods reassessment of the same is against the spirit of Sections 193 and 195 of the Customs Act, 1969, even otherwise recovery created to view message of clearance of goods is not warranted under the law. Impugned Order is neither fanciful nor colorful but the same was passed after detailed scrutiny of the case and falls well under the warrant of law, needs no legal interference. By doing so, I hereby pass the order and dismissed all the appeals being without merit, with no order as to cost.

9.Judgment passed and announced accordingly.

HBT/37/Tax(Trib.) Appeals dismissed.